The aggregate supply curve will shift to the right when the:
A. amount of labor in the society decreases.
B. capital stock of the society shrinks.
C. amount of natural resources in the society gets smaller.
D. amount of labor in the society increases.
Answer: D
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The bowed-outward shape of a PPF
A) is due to capital accumulation. B) reflects the unequal application of technology in production. C) illustrates the fact that no opportunity cost is incurred for increasing the production of the good measured on the horizontal axis but it is incurred to increase production of the good measured along the vertical axis. D) is due to the existence of increasing opportunity cost.
Netflix introduced DVD rentals via US Mail whereby customers do not have to leave their home to rent movies. They also introduced the concept of no-late fees. Netflix has enjoyed strong profits over the last few years
However, what does economic theory tell us should happen to these profits in the long run and why?